Consumer Financial Protection Bureau: Enforcing federal ...
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Consumer Financial Protection Bureau: Enforcing federal consumer protection laws
The Consumer Financial Protection Bureau (CFPB) was created in the wake of the financial meltdown to stand up for consumers and make sure they are treated fairly in the financial marketplace. Supervising financial companies and enforcing federal consumer protection laws is core to the Bureau carrying out its mission. Since opening its doors in 2011, the CFPB has held law breakers accountable and helped consumers harmed by illegal practices.
CFPB enforcement and supervision by the numbers
$11.7 billion: Approximate amount of relief to consumers from CFPB supervisory and enforcement work, including: $3.6 billion in monetary compensation to consumers as a result of enforcement activity $7.7 billion in principal reductions, cancelled debts, and other consumer relief as a result of enforcement activity $347 million in consumer relief as a result of supervisory activity
27 million: Consumers who will receive relief as a result of CFPB supervisory and enforcement work
$440 million: Money ordered to be paid in civil penalties as a result of CFPB enforcement work
Supervising financial companies
The CFPB supervises companies to determine their compliance with federal consumer financial laws, to assess risks to consumers, and to help ensure a fair and transparent marketplace for
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consumers. In addition to its authority over banks and credit unions with assets over $10 billion, and their affiliates, the CFPB is the first federal agency with supervisory authority over certain nonbank financial companies. These nonbanks include mortgage lenders and servicers, payday lenders, and private student lenders of all sizes, as well as larger participants in the debt collection, consumer reporting, auto finance, student loan servicing, and international money transmission markets.
The CFPB routinely resolves issues identified through the confidential supervision process through supervisory actions. These actions, which include self-reported violations at banks and nonbanks, have resulted in more than $347 million in remediation to approximately 2 million consumers.
Enforcement highlights
As of July 2016, CFPB enforcement activity has resulted in over $11.4 billion in relief for more than 25 million consumers harmed by illegal practices.
Credit cards
The CFPB has secured billions of dollars of relief to millions of consumers harmed by deceptive marketing and enrollment, unfair billing, illegal debt collection practices, and discriminatory credit card practices.
Bank of America ? $727 million consumer refund for deceptive marketing: The CFPB ordered Bank of America to provide $727 million in relief to consumers harmed by practices related to credit card add-on products. Roughly 1.4 million consumers were affected by Bank of America's deceptive marketing of their add-on products. Bank of America also illegally charged approximately 1.9 million consumer accounts for credit monitoring and credit reporting services that they were not receiving. In addition to the relief, Bank of America was ordered to pay a $20 million civil penalty.
Citibank ? $700 million in consumer relief for illegal credit card practices: The CFPB ordered Citibank, N.A. and its subsidiaries to provide an estimated $700 million in relief to eligible consumers harmed by illegal practices related to credit card add-on products and services. Roughly 7 million consumer accounts were affected by Citibank's deceptive marketing, billing, and administration of debt protection and credit monitoring add-on products. A Citibank subsidiary deceptively charged expedited payment fees to nearly 1.8
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million consumer accounts during collection calls. Citibank and its subsidiaries will pay $35 million in civil money penalties.
JPMorgan Chase Bank & Chase Bank ? $309 million consumer refund for unfair billing: The CFPB ordered Chase Bank USA, N.A. and JPMorgan Chase Bank, N.A. to refund an estimated $309 million to more than 2.1 million customers for illegal credit card practices. This enforcement action is the result of work started by the Office of the Comptroller of the Currency (OCC), which the CFPB joined. The agencies found that Chase engaged in unfair billing practices for certain credit card "add-on products" by charging consumers for credit monitoring services that they did not receive.
GE Capital ? $225 million consumer refund for deceptive marketing and discrimination: The CFPB ordered GE Capital Retail Bank (GE Capital), now known as Synchrony Bank, to provide an estimated $225 million in relief to consumers harmed by illegal and discriminatory credit card practices. GE Capital must refund $56 million to approximately 638,000 consumers who were subjected to deceptive marketing practices. As part of the joint enforcement action by the CFPB and Department of Justice, GE Capital also provided approximately $201 million in redress to approximately 133,400 borrowers excluded from debt relief offers because of their national origin; this number includes approximately $4 million of additional redress based on GE Capital's identification of additional eligible consumers This order represents the federal government's largest credit card discrimination settlement in history.
Discover ? $200 million consumer refund for deceptive marketing: The CFPB and FDIC ordered Discover Bank to refund approximately $200 million to more than 3.5 million consumers and pay a $14 million civil money penalty. This action results from an investigation started by the FDIC, which the CFPB joined. The joint investigation concerned deceptive telemarketing and sales tactics used by Discover to mislead consumers into paying for various credit card "add-on products" ? payment protection, credit score tracking, identity theft protection, and wallet protection.
Capital One ? $140 million consumer refund for deceptive marketing: The CFPB ordered Capital One Bank (U.S.A.), N.A. to refund approximately $140 million to two million customers and pay an additional $25 million penalty. This action results from a CFPB examination that identified deceptive marketing tactics used by Capital One's vendors to pressure or mislead consumers into paying for "add-on products" such as payment protection and credit monitoring when they activated their credit cards.
American Express ? $85 million consumer refund for illegal practices: The CFPB ordered three American Express subsidiaries to refund an estimated $85 million to approximately
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250,000 customers for illegal card practices. This action is the result of a multi-part federal investigation which found that at every stage of the consumer experience, from marketing to enrollment to payment to debt collection, American Express violated consumer protection laws.
American Express ? $59.5 million consumer refund for deceptive marketing and unfair billing: The CFPB ordered American Express to refund an estimated $59.5 million to more than 335,000 consumers for illegal credit card practices. These practices included unfair billing tactics and deceptive marketing with respect to credit card "add-on products" such as payment protection and credit monitoring. American Express will pay an additional $9.6 million in civil penalties to the CFPB.
JPMorgan Chase ? Debt relief for over 528,000 consumers and $50 million consumer refund for illegal debt collection practices: The CFPB, along with authorities in 47 states and D.C., took action against JPMorgan Chase to to permanently stop all attempts to collect, enforce in court, or sell more than 528,000 consumers' accounts. Chase was also ordered to pay at least $50 million in consumer refunds, $136 million in penalties and payments. The CFPB and states found that Chase sold bad credit card debt and illegally robo-signed court documents. Chase sold third-party debt buyers "zombie debts", which include accounts that were inaccurate, settled, discharged in bankruptcy, not owed, or otherwise not collectible.
U.S. Bank ? $48 million refund for illegal billing practices: The CFPB ordered U.S. Bank to provide an estimated $48 million in relief to consumers harmed by illegal billing practices. U.S. Bank consumers were unfairly charged for certain identity protection and credit monitoring services that they did not receive. These services were sold as "add-on products" for credit cards and other bank products such as mortgage loans and checking accounts. U.S. Bank will pay a $5 million civil money penalty to the CFPB.
GE CareCredit ? $34 million consumer refund for deceptive enrollment tactics: The CFPB ordered GE Capital Retail Bank and its subsidiary, CareCredit, to refund up to $34.1 million to potentially more than one million consumers who were victims of deceptive credit card enrollment tactics. At doctors' and dentists' offices around the country, consumers were signed up for CareCredit credit cards they thought were interest free, but were actually accruing interest that kicked in if the full balance was not paid at the end of a promotional period.
PayPal ? $15 million consumer refund for illegal online credit enrollment practices: The CFPB filed a complaint in federal court against PayPal, Inc. for illegally signing up consumers for its online credit product, PayPal Credit, formerly known as Bill Me Later.
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The CFPB alleged that PayPal deceptively advertised promotional benefits that it failed to honor, signed consumers up for credit without their permission, made them use PayPal Credit instead of their preferred payment method, and then mishandled billing disputes. The court entered a consent order that required PayPal to pay $15 million in consumer redress and a $10 million penalty, and also required it to improve its disclosures and procedures.
Affinion Group Holdings and Intersections ? $6.8 million in consumer redress for unfair billing of credit card add-on products and services: The CFPB filed complaints and consent orders against against two credit card add-on product vendors ? Affinion Group Holdings, Inc. (along with its affiliated companies) and Intersections Inc. ? for unfairly charging consumers for credit card add-on benefits they did not receive. Under the consent order Affinion was required to pay approximately $6.8 million in monetary relief for eligible consumers who had not yet received refunds and $1.9 million in civil money penalties. Intersections was ordered to pay approximately $55,000 in monetary relief to eligible consumers who had not yet received refunds and $1.2 million in civil money penalties.
Fifth Third Bank ? $3 million consumer refund for deceptive marketing of add-on products: The CFPB ordered Fifth Third Bank to provide $3 million in relief to 24,500 consumers and pay a $500,000 penalty for deceptive marketing and sales of its "Debt Protection" credit card add-on product. Among other things, Fifth Third's illegal practices included: misrepresenting costs and fees for coverage; misrepresenting or omitting information about eligibility for coverage; and making misrepresentations during the enrollment process.
Continental Finance Company ? $2.7 million consumer refund for illegal credit card fees: The CFPB ordered Continental Finance Company LLC, a subprime credit card company based in Delaware, to refund an estimated $2.7 million to approximately 98,000 consumers who were charged illegal credit card fees. The agency found that the company's "fee-harvester" subprime credit cards misrepresented certain fees and hit consumers with illegal charges. The order also requires the company to pay a civil penalty of $250,000.
Mortgages
MORTGAGE SERVICING
The CFPB has secured billions of dollars in relief for consumers harmed by systemic misconduct by mortgage servicers.
SunTrust ? $500 million in relief and $40 million consumer refund for servicing misconduct: The CFPB, along with the Department of Justice and authorities in 49 states
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and the District of Columbia, entered into a consent order with SunTrust Mortgage addressing systemic mortgage servicing misconduct including robo-signing and illegal foreclosure practices. The consent order requires SunTrust to provide $500 million in lossmitigation relief to underwater borrowers and pay $40 million to approximately 48,000 consumers who lost their homes to foreclosure.
Flagstar Bank ? $27.5 million consumer refund for violation of new mortgage servicing rules: The CFPB ordered Flagstar Bank to pay back $27.5 million to 6,500 consumers for violating the CFPB's new mortgage servicing rules by illegally blocking borrowers' attempts to save their homes. At every step in the foreclosure relief process, Flagstar failed borrowers. The bank took excessive time to process borrowers' applications for foreclosure relief, failed to tell borrowers when their applications were incomplete, denied loan modifications to qualified borrowers, and illegally delayed finalizing permanent loan modifications.
Green Tree Servicing ? $48 million in consumer compensation for mortgage servicing violations: The CFPB and the FTC obtained a federal district court order against Green Tree Servicing, LLC, requiring Green Tree to pay $48 million in relief to mortgage borrowers for failing to honor modifications for loans transferred from other servicers, delaying decisions on short sales, and deceptively charging consumers convenience fees for mortgage payments. Green Tree was also orderd to pay a $15 million civil money penalty.
Residential Credit Solutions, Inc. ? $1.5 million consumer refund for blocking consumers' attempts to save their homes: The CFPB ordered Residential Credit Solutions, Inc. to pay $1.5 million in restitution to consumers and a $100,000 civil money penalty for blocking consumers' attempts to save their homes from foreclosure. The mortgage servicer failed to honor modifications for loans transferred from other servicers, treated consumers as if they were in default when they weren't, sent consumers escrow statements falsely claiming they were due a refund, and forced consumers to waive their rights in order to get a repayment plan.
Ocwen ? $2 billion in relief and $125 million consumer refund for servicing misconduct: The CFPB, along with authorities in 49 states and the District of Columbia, filed a consent order against the nation's largest nonbank mortgage loan servicer, Ocwen Financial Corporation, and its subsidiary, Ocwen Loan Servicing, for misconduct at every stage of the mortgage servicing process. A federal court consent order requires Ocwen to provide $2 billion in principal reduction to underwater borrowers and to refund $125 million to nearly 185,000 borrowers who had already been foreclosed upon.
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Nationwide Biweekly Administration ? Mortgage payment companies sued for deceiving homeowners: The CFPB filed a lawsuit in federal district court against Nationwide Biweekly Administration, Inc., Loan Payment Administration LLC, and the companies' owner, Daniel Lipsky, alleging that Nationwide misrepresents the interest savings consumers will achieve through a biweekly mortgage payment program and misleads consumers about the cost of the program. The CFPB is seeking compensation for harmed consumers, a civil penalty, and an injunction against the companies and their owner. The lawsuit is pending.
MORTGAGE DISCRIMINATION
The CFPB has taken action to help consumers harmed by discriminatory mortgage lending practices.
PNC Bank (as successor to National City Bank) ? $35 million consumer redress for mortgage lending discrimination: The CFPB and the Department of Justice filed a joint complaint against National City Bank for alleging that National City Bank charged higher prices on mortgage loans to African-American and Hispanic borrowers than similarly situated white borrowers between the years 2002 and 2008. The consent order, which was entered on Jhanuary 9, 2014, by U.s. District Court for Western District of Pennsylvania, required National City's successor, PNC Bank to pay to pay $35 million in restitution to address the high costs paid by more than 76,000 harmed African-American and Hispanic borrowers.
Hudson City Savings Bank ? $27 million in direct loan subsidies and outreach programs for minority communities harmed by mortgage redlining: The CFPB and the Department of Justice filed a joint complaint against Hudson City Savings Bank alleging that Hudson City engaged in discriminatory redlining practices that denied residents in majority-Blackand-Hispanic neighborhoods in New York, New Jersey, Connecticut, and Pennsylvania fair access to credit. The bank located branches and loan officers, selected mortgage brokers, and marketed products to avoid and thereby discourage prospective borrowers in these predominantly Black and Hispanic communities. The consent order, entered by the court on November 4, 2015, requires the bank to pay $25 million in direct loan subsidies to qualified borrowers in the affected communities, $2.25 million in community programs and outreach, and a $5.5 million penalty. This represents the largest redlining settlement in history as measured by such direct subsidies.
BancorpSouth Bank -- $7.58 million in consumer redress, direct loan subsidies, and outreach programs for African Americans and minority communities harmed by mortgage lending discrimation: The CFPB and the Department of Justice filed a joint
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complaintagainst BancorpSouth Bank alleging several discriminatory mortgage lending practices along with a proposed consent order that is subject to court approval. If the consent order is approved by the court, BancorpSouth will pay $4 million in direct loan subsidies in minority neighborhoods in Memphis harmed by the illegal redlining, at least $800,000 for community programs, advertising, outreach, and credit repair, $2.78 million to African-American consumers who were unlawfully denied or overcharged for loans, and a $3 million penalty.
Provident Funding Associates ? $9 million consumer redress for pricing discrimination in in mortgage lending: The CFPB and the Department of Justice filed a joint complaint against Provident Funding Associates alleging that Provident charge higher broker fees on mortgage loans to African-American and Hispanic borrowers. The consent order, entered by the court in June 2015, requires Provident to pay $9 million in damages to harmed African-American and Hispanic borrowers.
MORTGAGE UPCHARGING, KICKBACKS, AND OTHER ILLEGAL PRACTICES
The CFPB has taken action against companies for selling consumers into costlier loans, paying illegal kickbacks in exchange for business and illegally splitting fees, as well as for making inadequate disclosures or using deceptive advertisements.
Paymap Inc. and LoanCare, LLC ? $33.4 million consumer refund for deceptive ads: The CFPB ordered Paymap Inc. to return $33.4 million in fees to consumers and pay a $5 million civil penalty to the CFPB, and ordered LoanCare, LLC to pay a $100,000 civil penalty to the CFPB for deceiving consumers with advertisements for a mortgage payment program that promised tens of thousands of dollars in interest savings from more frequent mortgage payments.
RPM Mortgage ? $18 million in consumer refunds for selling borrowers costlier mortgages: The CFPB filed a complaint in federal district court against RPM Mortgage, Inc. and its CEO, Erwin Robert Hirt, for illegally paying bonuses and higher commissions to loan originators to incentivize them to deliver consumers into costlier mortgage financing terms. RPM is required to pay $18 million in refunds to consumers and a $1 million civil penalty, and Hirt is required to pay an additional $1 million civil penalty.
Amerisave Mortgage Corp. ? $14.8 million consumer refund for bait-and-switch mortgage scheme: The CFPB ordered Amerisave Mortgage Corporation, and its affiliate, Novo Appraisal Management Company, to provide $14.8 million in refunds to harmed consumers and pay a $4.5 million penalty for engaging in a bait-and-switch mortgage lending scheme that harmed tens of thousands of consumers. The owner of both companies, Patrick Markert, as an individual, will pay an additional $1.5 million penalty.
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